State consumer advocate: Boulder doesn't have authority to claim county customers

Office of Consumer Counsel says PUC must make decision

The Public Utilities Commission -- and not the city of Boulder -- has the authority to determine who will provide electricity to 5,800 county households and businesses that Boulder has identified as potential future customers of its municipal utility, the state Office of Consumer Counsel said in a filing with the PUC.

The Office of Consumer Counsel represents residential, small business and agricultural utility customers as a class and advocates for their interests before the Public Utilities Commission, which regulates the state's private utilities.

Boulder has said if it creates a municipal electric utility, it intends to condemn two substations that serve both city and county customers and the related electric infrastructure. Roughly 5,800 electric customers in unincorporated Boulder County -- largely in the Gunbarrel area -- would become customers of the Boulder utility.

Xcel Energy has asked the Public Utilities Commission to intervene. It argues that it has a certificate of public convenience and necessity to serve those customers, and that certificate cannot be taken away unless Boulder can show that Xcel is unable or unwilling to serve those customers.

Boulder's attorneys point directly to the state constitution, which gives home rule cities the right to condemn utility infrastructure inside and outside their boundaries.

The Public Utilities Commission does not plan to hold a hearing on the matter. Rather, the commissioners will rule based on the arguments in the filings. However, they will deliberate at a public meeting, the date of which has not yet been announced.

Boulder spokeswoman Sarah Huntley said the city's attorneys are reviewing the filings now and plan to address the arguments of the Office of Consumer Counsel and other groups that filed briefs in the case by the end of the month.

Authority to serve

However, the city continues to believe it has the authority both to condemn Xcel's infrastructure in Boulder County and to serve those customers.

In its filing with the Public Utilities Commission, Boulder argued that the certificate of public convenience and necessity is a property right that can be condemned, just as power poles and wires can be condemned.

In its own filing, the Office of Consumer Counsel also referred to the certificate as a property right, but one that cannot be taken away from Xcel without due process. The filing said the Colorado Supreme Court said the PUC had the authority to regulate the city of Loveland's utility operations outside its boundaries.

"Unlike Boulder city residents, the county customers were excluded from the November (2011) vote that allowed Boulder to move forward with municipalization," the consumer counsel wrote. "Further, the county customers lack the power to control the actions of Boulder in deciding issues that directly impact them; such as rates. This is especially concerning to the OCC since the OCC is statutorily mandated to represent these customers. Many Boulder County residents have even lodged complaints with the commission and expressed strong opposition to being a Boulder municipal utility customer."

Xcel spokeswoman Michelle Aguayo said the company appreciates the position taken by the Office of Consumer Counsel.

"It supports Xcel Energy's legal position, namely, that a Boulder municipal utility cannot be unilaterally imposed by Boulder upon county residents," she said.

'Not going to break apart the system'

City Council members have said they are sensitive to the question of whether Boulder County residents want to be served by a city-run utility. Residents of the Gunbarrel area have organized both in favor of and in opposition to a municipal utility that could serve their area.

The City Council has adopted language that indicates the city will attempt to determine the wishes of a majority of affected county residents and pursue regulatory and legislative changes that would give those residents a choice in their utility provider.

Huntley said the city has not made a final decision about whether it will serve those residents, even if it acquires the infrastructure. The city is exploring whether there is a way to allow those customers to keep Xcel meters.

However, that doesn't change the city's legal argument, she said.

"We're not going to break apart the system," Huntley said. "The whole purpose is to not break up the system. If we have to distinguish between the right to condemn and the right to serve, that will be a matter for council to decide at a later date."

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